The dual-specificity phosphatase encoded by vaccinia virus, VH1, is essential for viral transcription in vivo and in vitro.

The genetic complexity of vaccinia virus is such that as well as encoding its own transcription and replication machinery, it encodes two protein kinases and a protein phosphatase. The latter enzyme, designated VH1, is a prototype for the dual-specificity class of phosphatases. Here we report that the H1 phosphatase is encapsidated within vaccinia virions and describe the construction of a viral recombinant in which expression of the H1 gene is regulated by the presence or absence of isopropylthiogalactopyranoside (IPTG) in the culture medium. When expression of H1 is repressed, the number of viral particles produced is not compromised but the fraction of these particles which is infectious is significantly reduced. The lack of infectivity of the H1-deficient particles is specifically correlated with their inability to direct the transcription of early genes either in vitro or in vivo. A proximal role for the viral phosphatase in regulating the onset of viral gene expression is implied. Prominent among the encapsidated proteins found to be hyperphosphorylated in H1-deficient virions is the 11-kDa product of the F18 gene; this protein is the major DNA-binding component of the viral nucleoprotein complex. The ability of recombinant H1 phosphatase to reverse this hyperphosphorylation in permeabilized virions strengthens the conclusion that the F18 protein is a bona fide substrate for the H1 phosphatase.